Fight Rising Food Costs with these Inventory Management Tips 

Inflation is a global problem for businesses and consumers around the world. For example, Philippine annual inflation blew past expectations in January to reach a fresh 14-year high on surging food prices, causing a strain on all businesses, especially in the restaurant and tourism industries. With the country’s food inflation reaching 10.7% in January 2023, the need to plan ahead is more crucial than ever for all restaurants in the Philippines, who have to control costs and manage inflation’s impact on their profits. Thankfully, there are ways for restaurants around the globe, not just in the Philippines, to fight inflation and keep their operations afloat. Better control over their stock management and purchasing system, building relationships with suppliers and producers that can offer long-term stable pricing arrangements, as well as leveraging technology through automated stock tracking and data analytics to strategic cost-saving measures are key steps towards overcoming inflation pressures.  

All in all, inflation may be high now – but fighting back against it is still doable. One clear way to start is by looking closer at how your business tracks inventory and fine tuning your purchasing process. 


Better inventory management keeps costs down and improves profits 

Every restaurant is familiar with cost of goods, but if your inventory isn’t properly managed, it could cost you more than you expected, throwing off your Net Income and Cash Flow forecasts. With inflation reaching record highs due to surging food prices, inventory management is a key factor in running a cost-effective kitchen, and a successful business overall.  

What is Inventory Management? 

Inventory management is the process of effectively tracking the items that make up your business’s inventory. This includes monitoring how much stock you have on hand, when items need to be restocked, and which items are selling better than others. By having a better understanding of your inventory, you can reduce waste, order only what you need, and avoid overspending on unnecessary items. 

You’ll also better understand what menu items bring higher returns, therefore giving you a better idea on which ingredients to stock up on. Having a system to calculate the ideal quantity to purchase from suppliers to benefit from bulk pricing will also maximize the value of your capital. Kitchens that carefully manage their inventories keep an eye on those costs and improve their bottom line – low costs for the same quality ingredients means a win for everyone!  

Implementing a comprehensive and effective inventory control system is a tall order, whether you’re a startup restaurant or an food service enterprise with multiple branches and hundreds of staff. Thankfully, there are a lot of tools to help business owners, chefs, and managers alike to keep up.  

Benefits of Using Inventory Management Tools 

Using inventory management tools, especially when integrated with a Point-of-Sale or POS system, can provide several benefits for restaurant owners. For one thing, these tools help you optimize ordering and stocking processes by allowing you to track which items are popular and which ones aren’t selling as well. This information will allow you to adjust your ordering patterns accordingly so that you don’t wind up with too much or too little stock on hand.  Additionally, these tools make it easier to keep track of expiration dates so that old products don’t get thrown out unnecessarily – resulting in extra savings for your business. 

Inventory management tools can also streamline communication between staff members – ensuring that everyone is on the same page when it comes to what needs to be ordered and when it needs to be done. This increased efficiency can save time and money while boosting employee morale as well! 

Read on to learn more tips on effective inventory management for your restaurant. 


Here are some tips for effective inventory management: 

By using the following tips to manage inventory, restaurants can easily keep their costs down while still providing quality dishes to valued customers. 

Keep track of what you have in stock, and reorder items when necessary 

As restaurant owners, it can be stressful when inflation skyrockets. But one thing you can do to make your life easier is to keep track of what you have in stock and making sure to reorder items when necessary – this will help avoid a decrease in profits due to constantly having too many or too few ingredients and other items. Taking the time to plan out when to order the right amount of supplies each week can go a long way, so take a close look at what’s running low, and tackle restocking efficiently. It may seem tedious but this simple task will protect your budget–now more than ever! 

To make sure that you are stocking your restaurant with the right items and at the right prices – real-time tracking is key. With a POS built specifically for restaurants integrated with your inventory management system, you’re better equipped to accurately manage inventory and understand when it is necessary to reorder items. This way, your restaurant can stay stocked for customers and save money in the process. 

Avoid overstocking items that may go bad 

As inflation continues to climb at a staggering rate, restaurant owners can no longer afford to overstock items that may go bad. The key step to combatting this is for restaurants to identify their PAR stock – the ideal inventory level an item should be stocked at in order for its freshness and monetary value not to be compromised. Taking the time to plan out when to order the right amount of supplies each month can go a long way, so take a close look at what’s running low, and tackle restocking efficiently. 

You can do this is by identifying how many times you plan on ordering a particular ingredient, and comparing it to the quantity of items sold that uses that ingredient. By knowing your recipes and using just simple math will get you to where you want to be. But if you have hundreds of ingredients and menu items, this is going to take a lot of time. Thankfully though technology for restaurants have come a long way, and there are software easily available to comb through sales and inventory data to compute automatically each ingredients PAR stock and recommended ordering frequency.  

So don’t let rising inflation leave you scrambling or costing you more money than necessary – identify your par stock and make sure your restaurant is always at the ideal stock level! 

Optimize Your Purchasing Process 

Having a purchasing system to keep track of what you have in stock and what needs to be replenished regularly is essential for restaurants. Implementing a PAR stock system and regular physical counts can help you stay informed about current inventory levels, so you can order necessary items to avoid shortages. Regularly checking food consumption also helps ensure that the products won’t spoil, especially with volatile food inflation. Staying on top of purchasing can prevent unnecessary purchasing costs, saving your restaurant money over the long run. It’s even easier nowadays with restaurant purchasing systems that can generate purchase orders based on remaining stock inventory. 


Make use of technology to beat rising food costs 

Running a restaurant in today’s fast-paced and ever-changing world can be a challenge.  It is now more important than ever to have efficient systems and processes in place. Investing in new technology today will help you streamline your sales, inventory management, purchasing processes to keep your business running smoothly and profitably. Additionally, modern POS and inventory technology can provide forecasting insights that restaurants would not have seen before. It can also give valuable data on beverage and food costs to reduce overspending with smarter purchasing decisions.  


Inflation these days may be high, but there are ways to fight back. Better inventory management is one way to improve your bottom line and keep costs down. By following these tips for effective inventory management, you can streamline your process and make sure you’re always getting the best deals on the items you need.  

Mosaic Solutions offers a comprehensive suite of tools to help businesses with their inventory management needs – check us out today to learn more! Click here to learn more.